FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE 12/11/1997 DEPARTMENT OF PRIME MINISTER AND CABINET Program 7--Aboriginal and Torres Strait Islander Affairs

ACTING CHAIR
--I welcome representatives from ATSIC.

Senator BOB COLLINS
--Once again, I appear to be the only senator
asking questions. Acting Chair, the minister is aware, as are the ATSIC
officers because I gave prior notice--it is not something I always do--that
I want to canvass tonight both the Daffen and Fingleton reports. I have
other questions, even though they are, strictly speaking, considered in C.
Because it is the most substantive part, is there any objection to my
starting with it?

Senator BOB COLLINS
--I have a number of questions to ask about
the Daffen review which, as you are aware, is somewhat dated at this point.
I was wondering whether any of the officers at the table wanted to make any
preliminary statement in respect of the Daffen review in order to put it in
context.

Ms Turner
--I will ask Mr Schnierer to handle that.

Mr Schnierer
--The Daffen review is now just over three years old.
We are now looking to the future in terms of some other reviews that are
under way. While it is dated in time, we are also having a good, hard look
at the organisation from a couple of perspectives at this point in the
section 26 review and the work review study. So it is dated in that sense
as well as in terms of the direction in which the structure of the
organisation might go.

The report was released in May 1994. It made a number of
recommendations about the structure of the organisation. In very general
terms, the executive management of the organisation agreed to many of those
recommendations, but not all. In broad terms, the report recommended that
staffing resources should be redirected to state and regional offices with
particular emphasis on increasing numbers of field staff; that state
offices should increase their support to regional offices; that personnel
functions should be moved from central office to the state offices to
provide a more immediate service to staff in our regional and state
offices; and that we should allocate additional resources to commercial
Commonwealth-state relations units in different state offices.

I can report that, essentially, the proportional changes that were
required between central office, state offices and the regional offices
were achieved. They are still largely in place today, although we have had
a number of major changes to the organisation in the three years since the
report was released. There have been some ons and offs in terms of
transferring functions and staff between the three levels. But the
proportional split is essentially the same as it was then.

Senator BOB COLLINS
--I would just ask a number of questions
about this report. I would just make the point--as I made to Ms Turner when
I spoke about this prior to estimates--that I do not personally have a
particular view about any or all of these recommendations in the sense of
them being wise and sensible or not. But, in responding to what ATSIC has
done about those recommendations and particularly where those
recommendations were not carried out--for possibly very good reasons--I
would like you to indicate to me why that was the case.

You mentioned a few minutes ago one of the central criticisms of the
Daffen report of the then ATSIC, and I know it has changed considerably
since. To quote the report, Mr Daffen found that central office here in
Canberra had grown in number from 327 on its inception in 1991 to 488 as at
November 1993, which was a growth of seven per cent, but that over the same
corresponding period of time the state offices had decreased by four per
cent and the regional offices by three per cent. He also found that central
office staffing accounted for 37 per cent of ATSIC's work force. I wonder
if you could tell me what those same statistics are now.

Mr Schnierer
--I have some figures here on paid staff. At the end
of 1993-94, 31 per cent of staff were at central office; today there is
27.9 per cent. For state offices in 1993-94, it was 17 per cent of staff;
in 1997-98, it is 19.7 per cent--so it has gone up. Back in 1993-94 in
regional offices, it was 43.6 per cent of staff; today, it is up to 46.8
per cent. So there has been a movement there, which has continued over that
period of time.

Senator BOB COLLINS
--Is that situation static or is it continuing
to move in that direction? Or has that matter been basically resolved and
it has settled down now?

Mr Schnierer
--This is one of the reasons why we have been
conducting a particular review now called the work review study. It is
recommending that we also look at how we make those arrangements in
relation to service and program delivery in state and regional offices to
improve and increase the effectiveness of our services there. That review
is not talking about shifting resources, it is looking at how we should
structure ourselves and take advantage of some new ideas that they are
putting forward in terms of how we can better deliver our programs and
provide policy advice to the board and to the minister. While there will
not be any shifts, as I understand it, between the three levels of
resources, we will certainly be looking at the way business is conducted
within the organisation and how that is structured.

Senator BOB COLLINS
--But in terms of that central issue of the
actual shift of resources, which you have indicated has moved in the way
that Mr Daffen has recommended--although clearly not to the extent that he
recommended--is it the view now of ATSIC that that broad shift has been
completed; or is there still a view in ATSIC that the movement of staff
away from Canberra to the regions needs to continue? That is, have you got
the shift to the point where you are going to leave it?

Mr Schnierer
--I understand we are at the point where we are going
to leave it.

Senator BOB COLLINS
--That is fine. That is all I wanted to know.
One of the other central concerns that Mr Daffen raised, as you are aware,
was the very high proportion of support staff--leaving aside where they
were located--as against field staff. Support staff at the time of his
review comprised 34 per cent of total staff as against field staff which
comprised 24 per cent. Can you tell me what those statistics are now?

Mr Schnierer
--Not off the top of my head, but the work review
study we have just completed has come up with a similar situation in terms
of our core functions. We believe that we should be looking to continue the
reduction in corporate support and move more resources towards program
delivery and policy formulation. Those recommendations are currently under
consideration in terms of how that can be arranged.

Senator BOB COLLINS
--Thanks. I do not want to just leave it
there, Mr Schnierer, in the sense that I would like that ratio provided--

Mr Schnierer
--Yes, I will take it on notice.

Senator BOB COLLINS
--Mr Daffen was concerned--this is the
significance of the point--that the low number of field staff by proportion
gave rise to concern over the quantity and quality of client service
delivery. As I know you are aware, the constant complaint that you get--not
just about ATSIC but also about the Northern Land Council, the Central Land
Council and politicians--is that people never see them on the ground. When
I am going around bush communities, people are constantly saying, `The
ATSIC people don't come out here enough.' They also say that the land
council people do not come out here and that I do not--you can never
satisfy that demand.

ACTING CHAIR
--Question?

Senator BOB COLLINS
--Does someone else want to ask one?

ACTING CHAIR
--No, I am asking you for your question.

Senator BOB COLLINS
--Sorry, I thought there was a queue.

ACTING CHAIR
--I thought you were making a speech.

Senator BOB COLLINS
--I was. That is what parliament is all about.

ACTING CHAIR
--Not estimates.

Senator BOB COLLINS
--You want to bet?

ACTING CHAIR
--Not while I am chairman.

Senator BOB COLLINS
--Really?

ACTING CHAIR
--Question?

Senator BOB COLLINS
--Mr Schnierer, if you could tell us on notice
what the present ratio is.

Mr Schnierer
--Yes.

Senator BOB COLLINS
--Thank you. I do want to go through the
recommendations, but some other central problems raised by Daffen--and
ATSIC obviously agreed with this--included the preponderance of staff in
head office, the ratio of support staff to field staff and the lack of
staffing stability caused by too great a reliance on temporary staff and
the number of staff acting in higher positions. I had a look at those
statistics myself and they were very high then. Has that situation changed
at all since the review?

Mr Schnierer
--I am not sure what the trend is since the review.

Senator BOB COLLINS
--Daffen actually said that recruitment
procedures of ATSIC needed to be improved and the time taken to fill
vacancies in ATSIC was excessive. Has this been addressed?

Mr Schnierer
--My feeling is that our employment of temporaries
has gone down dramatically. I do not want to get into statistics, I would
rather give you an accurate answer on that.

Senator BOB COLLINS
--Take that again on notice.

Mr Schnierer
--That is on acting and HDA?

Senator BOB COLLINS
--Yes, I want the comparison between the time
that Daffen did his review of temporary as against permanent, people acting
in higher duties et cetera. His concern was that that needed to be improved
and the recruitment practices of the organisation had to be addressed in
terms of the time that was being taken to fill vacancies.

Daffen went on to recommend the establishment of area offices in lieu of
state offices. He recommended a transfer in globo of 30 per cent of staff
and resources from central office to these regional offices. Where is that
at?

Mr Schnierer
--We did not accept that recommendation in terms of
the area offices. In fact, we left that as an option to be considered later
on if we thought it was worthy of more consideration. The track that we
went down was, rather than having area offices, to augment the major state
offices with a deputy state manager at SES level, which meant a move of
resources from central office out to states in terms of SES level
resources. We saw that as a much better way at that point in time to
augment the services that were delivered to people in the regional offices
and regional councils and to communities.

Senator BOB COLLINS
--So you disagreed with that particular
recommendation?

Mr Schnierer
--That particular thing on area offices, but we did
not close the door completely on it. It is an idea that can be considered.

Senator BOB COLLINS
--In terms of the major review of the ATSIC
Act that was mentioned earlier, can someone tell me where that is at at the
moment in terms of process?

Ms Turner
--We are currently in the process of having a round of
consultations with indigenous communities around the country. We dispatched
in September a consultation kit, which included a discussion paper and a
one-page issues sheet that summarises the issues that we would like to have
the community's views on. There are two or three questions at the bottom of
each of those sheets--in some cases a few more. There is also a blank sheet
attached where community groups can provide their answers.

The steering committee comprises the Chairman, me, Commissioner Crawshaw
from Darwin, Commissioner John Delaney from Sydney, a representative of the
Office of Indigenous Affairs and a representative from our minister's
office. The steering committee is involved in a major consultative meeting
in each state and territory. The consultations and the date for the closure
of submissions is 30 November this year.

We will write up the report and have a meeting with national peak
indigenous organisations in January with our board. A report will go to the
February board meeting and, if the board is happy with that document, it
will be submitted to the minister following that meeting.

Senator BOB COLLINS
--Thanks very much. Considering that the
deadline is the end of the month, do you have any idea how many submissions
you have received to date?

Ms Turner
--No, I do not off the top of my head, sorry.

ACTING CHAIR
--Do you want them to take it on notice?

Senator BOB COLLINS
--No, I do not think so; nothing hangs on it.

Ms Turner
--Can I just give you some information on the changes to
the numbers of staff since Daffen. For example, in central office in
1993-94, we had 431 officers and at pay nine this year we have 350. The
numbers in state offices went from 239 to 247 and in regional offices it is
about the same. During this time we have had budget cuts across the board.
While the state offices and the regional offices have pretty well
maintained their numbers--state offices have certainly increased their
numbers and regional offices at the moment are down just slightly, by
seven, on what they were in 1993-94--central office is down by over 80. We
have taken the lion's share of the cuts in order to have that support out
there in the network.

Senator BOB COLLINS
--I might also add for the record, which is
important, that the Daffen report--obviously I want to concentrate on the
recommendations--was very supportive of the work that ATSIC was doing. In
fact, I will just read briefly from the relevant section. He said:

ATSIC commenced operations in 1990 and, in its short history, has made
significant progress.

I will now just go through some of the detail, Mr Schnierer. There was a
concern raised by Mr Daffen about the slow progress being made in the
development of computerised systems in management of the financial
information and, as he said, this particularly applies in the area of
grants administration. Has there been any progress made on that?

Mr Schnierer
--We have had some major advances on computerised
systems in relation to grants. We are just now getting into a very
important phase in relation to our system called InSight, which is our most
important software package in relation to administration of grants in
addition to the FMI system itself. We have undertaken a major review in
relation to our grant procedures, and that has set us up to have a look at
how the software supports that.

Now we are just going through a phase of modifying that system to get us
through the next grant phase. For the following year, we will be looking at
a whole new InSight system based on the experience of the first and
slightly modified system. So over the next six to 12 months we will be
looking at quite a significant upgrade, particularly to our InSight system,
and we are making quite a huge investment in the replacement of our
financial management information system. Hopefully that will start to come
on-line by the end of this financial year.

Central Office structure is characterised by a proliferation of
relatively small work units not conducive to efficient resource
utilisation. There are 60 work units, each highly specialised--

and, of course, the detail of the report basically talked about these
little islands and that there was poor communication between them--

and mostly headed by a SOG B officer.

Can you respond to that concern?

Mr Schnierer
--We have a very strong emphasis now on people
working across divisions and branches and sections in terms of policy
development and formulation. However, we do need specialist units from time
to time, and they are set up. Obviously there is a particular one now on
Wik, for example, which is a priority issue for the commission. So we
reserve the resources to be able to do that and to target resources for
particular issues.

Senator BOB COLLINS
--Sure, but the particular concern that Daffen
raised was that these units were operating--at least as he saw it--far too
exclusively and not efficiently utilising common resources. Are you
satisfied that that situation has been addressed?

Mr Schnierer
--I would have to say no at this point in time
because our work review study has looked at a radical change to the
structure of central office, changing how our central office is to be
organised, or put a model to us that we need to consider. We are having a
good hard look at it. It will change the nature of how we operate.

Senator BOB COLLINS
--Is that being done by consultants?

Mr Schnierer
--The report has been done by consultants, yes.

Senator BOB COLLINS
--So that is ongoing?

Mr Schnierer
--Their report is finished and we are now looking at
it.

Senator BOB COLLINS
--Yes, but I mean that the implementation is
an ongoing matter.

Mr Schnierer
--Yes.

Senator BOB COLLINS
--I have to tell you that these acronyms are
all Greek to me, even after all my years in this business. The report goes
on to say:

ATSIC's Central Office has a high classification profile. Sixty one of
ATSIC's eighty two SOG B positions are in Central Office. The 13 Branches
are each headed by an Assistant General Manager at SES 1.

I certainly understand the central thrust of these concerns. It goes on to
say:

The average salary of the 488 staff employed in Central Office
approximates the mid-range of ASO 6 ($42,356), compared to the overall
average within ATSIC of $39,703 . . .

The point is made, and I certainly understand it, that in terms of the
highly paid and, therefore by definition, the more productive or qualified
or whatever, there was a very heavy concentration of those in Canberra and
far too few of them out in the regions. Has that been addressed?

Mr Schnierer
--As I said earlier, we moved a number of SES
positions out into the states to augment the network supporting regional
offices, so a number of SES officers have moved out. In terms of our
profile and the benchmarks that Mr Daffen compared us to, I am not quite
sure that they are relevant to where we are today. Even then, my view is
that I am not sure they were the most relevant either because of the unique
situation of ATSIC and the sort of policy work that we have to cover in
relation to the number of policies and the range and diversity. We do have
a different demand on staff in terms of their work in the policy area and
in the program areas compared with other agencies which have their central
offices here in Canberra. So I would be questioning some of his benchmarks
in relation to that.

There is no problem at all in terms of us needing to constantly look at
that problem because that classification structure makes it difficult to
bring indigenous staff in, and that is one of our big concerns with trying
to change the structure to allow that to occur more effectively as well.

So I would question whether his benchmarks are still relevant to us
today and whether he really understood the uniqueness of ATSIC in terms of
the high level of policy work that we have to do and the diversity that we
have that I do not think any other agency has to deal with. So, in that
situation, some of the benchmarks have a question mark over them as far as
I am concerned.

Senator BOB COLLINS
--Is ATSIC satisfied that you do have
sufficient senior officers at the sharp end; that is, in the regions?

Mr Schnierer
--I believe so, yes.

Senator BOB COLLINS
--He goes on to say:

Notwithstanding an overall major investment by ATSIC in Staff
Development and Training of approximately 28 full-time staff and an
estimated $3.0m expenditure annually, there has been a limited return. An
overhaul of the Staff Development and Training function is necessary.

Has that been addressed?

Mr Schnierer
--Yes, it has. As I understand it, we moved the
functional responsibility for staff development and training for regions
and state offices out to the states so that they could have more direct
control over it and increase the opportunity for their training direction.
They can then be a lot more responsive to local needs and differences
within their states and within their particular regional offices and the
like. That responsibility was devolved, so that was a major change that we
undertook at the time.

Senator BOB COLLINS
--The next one has a very familiar ring to it
because the problem also involves nurses, teachers or whatever. He goes on
to make a recommendation that:

Special employment packages, outside normal APS conditions of service,
need to be formulated to attract and retain suitable staff in isolated
areas.

Do you want to comment on that?

Mr Schnierer
--Yes. We have been looking at the issue of remote
area packages for quite a few years now. It has been a difficult process
for us because each time we seek to get consideration of an additional
benefit of some sort there is usually some other agency who does not want
us to proceed down that track. With ATSIC being such a small agency, we
have not had the pull to come to grips with that and to succeed. With the
new workplace relations legislation, which has freed up the opportunities
for agencies to look at--

Senator BOB COLLINS
--Differentiation?

Mr Schnierer
--Exactly--we are going to look at that quite
strongly in our negotiations with staff over the next three to six months
as we look towards our first agreements.

Senator BOB COLLINS
--Thank you. I know it is an extremely
difficult area. It is not unique, as you know, to ATSIC. A lot of other
service delivery agencies have the same problem. I do not want to go
through this again, but the reason I put this to you is that I deliberately
gave prior notice of the level of detail that I wanted here tonight. Daffen
goes on from that recommendation to actually detail--and I do not want this
here tonight--in terms of recommendations right through to point 2.10, a
detailed list of specific changes that he recommended being made: 151
positions be distributed to areas of highest priority; in addition, 94
corporate service support positions in regional office; 245 positions
distributed in the way that he suggested, and so on. Are you familiar with
those specific, detailed recommendations?

Mr Schnierer
--If necessary, I can get the information.

Senator BOB COLLINS
--He says:

Field staff in Regional Offices should increase from 294 to 422 . . .
percentage of ATSIC's overall work force from 24% to 32% in the field--

and so on.

ACTING CHAIR
--Do you prefer to take that on notice?

Mr Schnierer
--I would like to take that on notice just to get the
accurate figures. I did run through some percentages earlier and I am not
sure whether they have--

Senator BOB COLLINS
--He goes on to say, for example, to take
another global resource statistic, that:

Field staff will represent 61% of Regional Office staffing.

Has that been achieved?

Mr Schnierer
--I would need to take that on notice.

Ms Turner
--Since that report was done, we have had the budget
cuts, which I referred to earlier, which have been particularly felt in the
regions. We also lost the health function and we have program managers
involved in our community housing and infrastructure program. The nature of
the work that is undertaken today is somewhat different in terms of field
staff from what it was in 1993-94. That needs to be reflected in any
answers that we provide to you.

Senator BOB COLLINS
--Sure, and what also needs to be said in
terms of accuracy is that Daffen also recommended an increase in the total
of ATSIC, not a decrease--only a marginal increase, but nevertheless an
increase. I have canvassed the central issues of Daffen in terms of his
major concerns and you have responded to those, but, as I indicated to
ATSIC earlier, I would like a detailed response to the detailed
recommendations.

ACTING CHAIR
--Can you table your questions?

Senator BOB COLLINS
--There is an easier way of doing that. I can
just refer to recommendations in the report itself.

Mr Rees
--Can I make a suggestion?

Senator BOB COLLINS
--Yes.

Mr Rees
--At the time we responded to Daffen, we put out a
circular to staff which explained exactly what the executive management had
decided to do. If we give you that document, it will be in the context of
the time and you can see for yourself that significant action was taken.

Senator BOB COLLINS
--Thank you, but just to get this right: are
you saying that that document was sent to staff at the time?

Mr Rees
--At the time of implementing the recommendations of the
Daffen report.

Senator BOB COLLINS
--So the document you are talking about is
advice on the response to the recommendations?

Ms Turner
--Yes.

Mr Rees
--Absolutely.

Senator BOB COLLINS
--Perfect. If you could provide that to the
committee, I would be grateful. For the completeness of the record, Mr
Schnierer, you mentioned a number of other reviews. Is that a complete list
of what is currently going on in terms of restructuring or reviews? There
is the overall one, the total review, and you mentioned a second one--I
cannot remember what you called it.

Mr Schnierer
--The work review study.

Senator BOB COLLINS
--Is that it?

Mr Schnierer
--On staffing matters?

Senator BOB COLLINS
--There are more--again on notice. There is no
need to go through it here tonight. If you would not mind, for
completeness, providing the committee with a list of the current reviews.

Sitting suspended from 9.30 p.m. to 9.39 p.m.

Senator BOB COLLINS
--I would like to turn to the Fingleton
review. Obviously, the reason for my interest in the Fingleton review--

ACTING CHAIR
--Just the question, I think.

Senator BOB COLLINS
--I am sorry, I have to put the questions in
context.

ACTING CHAIR
--Sometimes putting them in context confuses the
witnesses, I think. They are intelligent people.

Senator BOB COLLINS
--Yes, I understand that.

ACTING CHAIR
--They do not need the questions explained.

Senator BOB COLLINS
--I understand that; with respect, I think I
have actually cooperated to an extraordinary degree to curtail questions
tonight.

ACTING CHAIR
--You have.

Senator BOB COLLINS
--That is what I am trying to do. I want to
put it in context. I would like to explain why I want to put it in context.
The officers are obviously free to add whatever they want to the specific
questions I ask, which may save me asking a lot more questions. If I could
just conclude it would be a lot quicker--if you would let me.

The concern I have got and the interest I have got in the Fingleton
review is that such a substantial proportion of ATSIC's budget outlays go
to organisations that are incorporated under this particular act and are
not, in that sense, creatures of ATSIC in terms of accountability, and so
on. That is the reason for my interest in this matter. As I understand it,
this is the first full-blown review of this act that has been conducted in
the 20 years it has been in existence. Is that correct?

Ms Sculthorpe
--I believe that is the case.

Mr Rees
--Could I just qualify that answer a little bit. It is the
first full-blown review that looks at cultural as well as corporate law
considerations, but if you go back--I think into the early 1990s and the
late 1980s--there was a succession of reports on the legislation done by
lawyers and accountants.

Senator BOB COLLINS
--Thank you. I might just add--and I have
looked at this in the break--

ACTING CHAIR
--It would be best to wait until the minister returns
for that, please, if you are referring to--

Senator BOB COLLINS
--I was simply going to say that the section
of the act that we were discussing earlier--

ACTING CHAIR
--I suggest you wait until the minister returns.

Senator BOB COLLINS
--I gave an undertaking, with respect, Mr
Acting Chair, that I would clarify this at the earliest moment. The section
of the act is in fact as the minister has quoted it. I just wanted to
confirm that all the positions of the council, not simply the chairperson
and deputy chairperson, are subject to advice from the Leader of the
Opposition and, effectively, the Leader of the Democrats.

It has been suggested, I think, that a series of legislative amendments,
which were being pursued by the former government and which were designed
allegedly to increase the accountability of the 2,600 corporations across
Australia that are in receipt of hundreds of millions of dollars, be
scrapped. Is that also correct?

Ms Sculthorpe
--I am not sure, Senator, that that is strictly
accurate. The review was, as you would know, wide ranging. The
recommendations of the review basically sought to ensure that the act was
more culturally appropriate. It took up the question of accountability, and
there was discussion concerning where accountability should lie. I believe
it was suggested that it should lie more with the funding agency than with
the incorporations body.

Senator BOB COLLINS
--But it is correct, is it not, that Mr
Fingleton made a comparison--a rather stark one, I thought--between the
accountability requirements in respect of Aboriginal organisations and
other comparable organisations?

Ms Sculthorpe
--Yes.

Senator BOB COLLINS
--Which indicated that Aboriginal
organisations, certainly in respect of that comparison, were considerably
more regulated than other organisations?

Ms Sculthorpe
--Yes.

Senator BOB COLLINS
--Do you agree with that conclusion, that
assessment of Mr Fingleton's?

Ms Sculthorpe
--I certainly do.

Senator BOB COLLINS
--One of the fundamental recommendations of
the review was, as I understand it, that there be some degree at least of
deregulation of what the review quoted as being `highly formalistic
regime'. Would that include a substantial reduction in the very wide
ranging powers of the Registrar of Aboriginal Corporations?

Ms Sculthorpe
--Senator, I am not sure I can answer the question.
The former minister, as you know, contracted this review, and ATSIC
administered it. I am not sure that I can actually account for the thinking
of the consultant beyond what is contained in the report.

Senator BOB COLLINS
--I will resist the temptation to ask him to
come to the table. Perhaps if you cannot answer the questions, you could
take them on notice.

Ms Sculthorpe
--Perhaps that will not be necessary. I might have
another go at that. Could you repeat the question?

Senator BOB COLLINS
--One of the recommendations made was,
following on what we have just agreed on--that is, that there was an
enormous amount of paper regulation and requirements to comply and so on,
some of which were highly unrealistic considering the isolated nature of
some of these organisations--that there be deregulation of what was
described as a highly formalistic regime. The question was: if that
recommendation was followed through, would it in fact lead to a substantial
reduction in the existing wide ranging powers of the indigenous corporate
affairs watchdog, the registrar of indigenous corporations?

Ms Sculthorpe
--That would be possible, but that would depend on
what the amendments or the new legislation actually contained.

Senator BOB COLLINS
--The review concluded that if this degree of
deregulation and streamlining, whatever you want to call it, was carried
out it would result in an improvement in the actual accountability of these
organisations rather than a reduction. Is that correct?

Ms Sculthorpe
--Yes.

Senator BOB COLLINS
--The reason that this is very relevant, as
the minister knows full well, with the special auditors report and so on in
terms of non-complying organisations is that it is also a fact, is it not,
that a great percentage of this so-called non-compliance, which has such a
terrible impact in the community where people think people are running away
with millions of dollars, was caused through failure to lodge documents
that Mr Fingleton found were unnecessarily onerous in any case.

Ms Sculthorpe
--I believe that to be the case.

Senator BOB COLLINS
--I think it is correct, is it not, Mr
Schnierer, that that was the conclusion of the special auditor himself?

Mr Schnierer
--There were a significant number of breaches due to
non-compliance in relation to lodgment of financial statements and audited
financial statements and the like. It might be worth discerning which
documents the registrar required and we required because there are
differences there as well.

Senator BOB COLLINS
--Does ATSIC agree with the finding of the
review that the legislation has never delivered its original promise--and I
remember when it was started--to provide indigenous groups with a simple,
flexible and inexpensive alternative to complex state and territory
legislation and to provide the Commonwealth with a vehicle for
self-management and self-determination?

Ms Sculthorpe
--Do you mean does the ATSIC board agree with that?

Senator BOB COLLINS
--Yes. It is open to anyone here to respond,
Ms Turner or the minister. You are aware that these were the objects of the
original act. I can recall it very well. It was going to be simple,
flexible, inexpensive but primarily--and this was one of the
priorities--provide a vehicle which was culturally appropriate, if you
like. Is it ATSIC's view or is it your view that the act has substantially
failed to deliver those objects?

Ms Sculthorpe
--I have a view. Yes, that is my view: that the act
was established to provide a simple mechanism for Aboriginal organisations
to incorporate; that it was never intended that organisations become
involved in complex financial matters requiring onerous reporting; and
that, over the years because of the political environment in which
Aboriginal affairs is situated, circumstances have changed and a lot of
organisations find the provisions of the act quite onerous. In fact those
issues, together with the accountability provisions of funding agencies, in
my experience have caused organisations a considerable deal of difficulty.

Senator BOB COLLINS
--Does the board of ATSIC have a view about
that? Have they ever expressed a view about that?

Ms Turner
--They would like to have greater contact with the
registrar. The registrar is not accountable to the board or has any direct
communication with the board under the current arrangements. The board
would like to see that change. The director of the OEA has a regular slot
at board meetings. The board would like the same sort of arrangement in
relation to the Registrar for Aboriginal Corporations.

Ms Turner
--Yes, to report on matters in relation to his work, as
Mr Miller does from OEA. It just keeps the board informed of where things
are at and how things are progressing. In terms of the benefits of the
legislation, it has been a relatively cheaper avenue for organisations to
become incorporated because organisations cannot receive any money from our
portfolio if they are not incorporated.

Not all of the Aboriginal and Torres Strait Islander organisations in
Australia are incorporated under this legislation. In fact, I think the
review found about half were, and half were incorporated under other forms
of legislation. So it has some benefits, but it also has a lot of measures
that make it a little more onerous. The board would like to see that
brought back in terms of being on a par with other corporate law
legislation.

Senator BOB COLLINS
--Ms Turner, has the board ever proposed
formally or informally to the registrar that he or a nominee should come
along to ATSIC meetings?

Ms Turner
--The registrar has been invited to address the board
on at least one occasion. They have not put into effect a regular
discussion with the registrar mainly because of the size of the board and
the amount of business they have to get through in terms of their
legislative requirements under our own act. Individual commissioners are in
touch with the registrar on matters from time to time.

Senator BOB COLLINS
--Leaving aside the legislative changes that
could be made and so on, there would not be a need for anything other than
an agreement for the registrar to have a regular appearance at board
meetings, would there not?

Ms Turner
--I think that would be right.

Senator BOB COLLINS
--If you were minded to do so, you and Mr
Bouhafs or whoever could simply do that by agreement at any time? There is
nothing currently to prevent that.

Ms Turner
--The chairman of the board could have that arrangement
with the registrar, but the registrar is essentially accountable to the
minister not to the ATSIC board.

Senator BOB COLLINS
--That is right.

Ms Turner
--In terms of a cooperative arrangement there is nothing
preventing that from happening.

Ms Sculthorpe
--The value of that would depend on the purpose of
the registrar talking to the board. Those matters about which board members
would be most concerned would, I believe, be matters to do with the
registrar's statutory independence. It may well be of limited value. There
certainly could be discussions of general matters.

Senator BOB COLLINS
--To take a real world example, would there be
any value or indeed are there any statutory or legal bars to this
happening--that is, for the registrar to meet with ATSIC officers or the
board in respect of organisations incorporated under his act funded by
ATSIC that are in trouble?

Ms Sculthorpe
--I believe that the answer to that question would
really need to come from the registrar. It relates to how he interprets his
responsibilities.

Senator BOB COLLINS
--Let me put it to ATSIC as the funding body.
I am sure you understand the point of the question. This constant
perception of misappropriation--and it is not just a perception but a
reality in some cases, of course--from memory, and tell if I am wrong about
this, is that the majority of situations where there are actual problems in
percentage terms are in organisations incorporated under this act rather
than organisations that are responsible directly to ATSIC. Is that correct?

Ms Sculthorpe
--I believe that was an outcome of the special
auditor's report.

Senator BOB COLLINS
--Does ATSIC believe that it would be, in a
cooperative way, an advantage to ATSIC to have direct discussions--indeed
they already happen--on a regular basis with the registrar on particular
problem organisations funded by ATSIC but administered by him?

Ms Sculthorpe
--I believe that a lot of ATSIC managers would
consider that to be an advantage in their grant administration.

Senator BOB COLLINS
--The clear implication in that answer is that
it does not currently happen.

Ms Turner
--I think that it happens from time to time. Without
wanting to speak on behalf of the registrar, I think he would say that his
resources constrain him in the number of activities that he can undertake.
Wherever possible we have liaison. We would like there to be greater
liaison so that we can nip situations in the bud a little earlier.

Senator BOB COLLINS
--Precisely, that is why I was pursuing it. So
ATSIC managers would see this as a plus?

Ms Turner
--Yes.

Senator BOB COLLINS
--I assume that ATSIC would also agree with
the finding of the review--and I think the special auditor noted this--that
the resources that are devoted to actually educating and training the
organisational staff in the complexities of the procedures that they are
obliged to conduct are, to quote the review, `woefully inadequate'?

Ms Sculthorpe
--Yes, ATSIC would agree with that.

Senator BOB COLLINS
--This next one, which is found in the review,
I would like a comment on. ATSIC officials and many others complained to
the review that administrators appointed by the Registrar of Aboriginal
Corporations acted like `little tin gods' and did not possess the necessary
skills to understand the tangled web of such organisations--that is, the
relationships of traditional owners, other resident, non-Aboriginal staff
assets and so on. Do you want to chance your arm on that?

Ms Sculthorpe
--Do we believe it to be the case, do you mean?

Senator BOB COLLINS
--Thank you.

Ms Sculthorpe
--Can I say that I have heard that sort of
criticism.

Ms Turner
--We also get a lot of criticism--

Senator BOB COLLINS
--I was actually present at a hearing of the
committee with the registrar and Aboriginal witness and that criticism was
actually being made across the floor so I assumed it was correct.

Ms Turner
--We also get a lot of criticism when we put a grant
controller in an organisation to assist with the financial management. I
think that organisations generally do not necessarily appreciate the
accountability requirements.

Senator BOB COLLINS
--I can relate to that. I was interested in
the conclusion that was reached which says:

The act vests a very wide authority in the single office of the
registrar and makes every Aboriginal corporation dependent to a greater or
lesser extent on the disposition--

and I am making no comment about the incumbent--

of whatever person that is filling that office.

Is that a conclusion with which you would agree?

Ms Sculthorpe
--Except to say that that would be the case for any
person holding any office. I am not sure if it is any more the case in this
particular one.

Senator BOB COLLINS
--Thank you. Mr Bouhafs himself said during
the review that `some of the act's provisions were sowing the seeds of much
discord and factionalism in communities across the country and were in need
of amendment'. The only reason I am putting this to you is that Mr Bouhafs
is not here. Are you aware of what particular bits of the act Mr Bouhafs
may have been referring to from your own experience when he said that parts
of the act were sowing the seeds of discord and factionalism?

Ms Sculthorpe
--No. I would really be guessing.

Senator BOB COLLINS
--Do not do that. Can I put the same thing to
you as far as ATSIC is concerned. Does ATSIC have any concern about any
aspects of the act from your own experience that you would see as causing
discord and factionalism in the communities that have corporations
incorporated under the act?

Ms Sculthorpe
--I believe some of it may relate to the provisions
governing the appointment of administrators. I cannot think of anything
else offhand. Some faction may be wanting action taken quickly if they
consider there to be undue delays, some of which may be caused by
provisions of the act. I cannot really add anything more to that.

Senator BOB COLLINS
--That is fine. That is very helpful. I knew
there were 2,600 corporations incorporated under the act, but I must admit
that I was somewhat startled by the results of the review because I was not
aware of this. Is it correct as far as you are aware that, in the 20 years
this act has operated, not a single indigenous council has been
incorporated under the act?

Mr Sadlo
--That is correct.

Senator BOB COLLINS
--That is correct?

Ms Sculthorpe
--Yes.

Senator BOB COLLINS
--That is certainly one object of the act that
has dramatically not been met. Thank you. Is it also correct, and I think
we have canvassed this, that this act imposed a stricter accountability
regime on indigenous corporations and applied to general corporations and
that this indeed was a state of affairs that the Aboriginal and Torres
Strait Islander Social Justice Commissioner said was, in his view,
discriminatory? Is that also ATSIC's position in terms of that level of
accountability?

Ms Sculthorpe
--The ATSIC board certainly believes that the
provisions of that act should not be any more onerous than the provisions
of any similar legislation.

Senator BOB COLLINS
--That is the position of the board?

Ms Sculthorpe
--Yes.

Senator BOB COLLINS
--Thank you. Is it also true that there is in
fact already a demarcation in terms of those levels of accountability
between Aboriginal organisations that are incorporated under this
particular act and Aboriginal organisations that are incorporated by other
means?

Ms Sculthorpe
--Sorry?

Senator BOB COLLINS
--Just in broad numbers.

Ms Sculthorpe
--It is roughly half.

Senator BOB COLLINS
--That was the figure I was searching for. It
is about half, isn't it?

Ms Sculthorpe
--Yes.

Senator BOB COLLINS
--Clearly, ATSIC would be of the view that
that is a completely unsatisfactory situation to allow to continue
obviously.

Ms Sculthorpe
--I do not know. I am not of that view, no.

Senator BOB COLLINS
--What would your view be then?

Ms Sculthorpe
--While there is Commonwealth legislation, I always
believe choice is a good thing.

Senator BOB COLLINS
--Sorry. I phrased the question badly. I do
not dispute that either. I think that is a good thing. Would it not be
advantageous for the communities, apart from anything else on the ground,
to have at least some commonality in broad terms between the accountability
requirements that need to be met by Aboriginal communities irrespective of
how they are incorporated?

Ms Turner
--Yes.

Senator BOB COLLINS
--Thank you. That is stating the obvious, but
we do that often here. I just wanted it on the record. Can you explain why
the act applies the full set of statutory requirements to all corporations:

. . . regardless of whether they are a multifunctional service provider
conducting major businesses and handling millions of dollars of grant funds
and income or their tiny remote communities which were only incorporated
years ago to get title to a small remnant of their traditional land.

Does ATSIC agree with that criticism of the act?

Ms Sculthorpe
--Can we explain why that is, did you say, Senator?

Senator BOB COLLINS
--Yes. There is no discretion, presumably,
within the act to differentiate.

Ms Sculthorpe
--I believe that is the case. I cannot explain why
that is.

Senator BOB COLLINS
--People who draft it--us--are obviously
responsible for that. I would imagine that ATSIC's view is that, in terms
of potential amendments to the act, that is an area that ATSIC would want
to see addressed.

Ms Sculthorpe
--Yes, I believe so. I am not sure the board has
discussed that specifically, but it would seem to make for very sensible
risk management.

Senator BOB COLLINS
--Rather than ask 10 questions, does ATSIC
have a general view in terms of those requirements and, to use an
expression that is in favour at the moment, a minimalist approach as to
what a fundamental set of sensible accountability requirements should be in
terms of satisfying the end result--that is, that funds are used for the
purpose for which they are intended?

Ms Sculthorpe
--My own view about that is that financial
accountability should primarily rest with the funding agency and that a
minimalist position in terms of the incorporation body should be more
concerned with something fairly simple like annual financial reporting.

Senator BOB COLLINS
--Thank you. For what it is worth, that is my
view too. Thanks very much. The other area that I must say interested me
greatly in terms of what the review disclosed was the extraordinary number
of exemptions from the requirements of the act that are there. Is the
reason for that, and I assume it is, because the only way organisations
have been able to get a workable situation--what we have just been talking
about--is to, at the end of the day, simply be exempted formally from the
requirements of the act?

Ms Sculthorpe
--I believe so.

Senator BOB COLLINS
--It seems to defeat the purpose somewhat at
the end of the day. We do not come out of this shining, I have to say, but
the minister of course initiated this review after 20 years. Maybe it
should have been done a decade before. How many exemptions are currently in
place--if you do not know you can take it on notice--in terms of those
2,600?

Ms Sculthorpe
--We will have to take that on notice.

Senator BOB COLLINS
--If you wouldn't mind. Is it also correct
that many of those exemptions are longstanding exemptions, that they extend
back over a long period of years which, in effect, provide for a very long
period of non-compliance?

Ms Sculthorpe
--I am not able to say, Senator. I could hazard a
guess, but they are really questions for the registrar.

Senator BOB COLLINS
--I accept that they are. I thought you might
have known.

Mr Rees
--Senator, could I note for the record that Mr Bouhafs had
a meeting tonight of a statutory kind with an Aboriginal organisation,
otherwise he would have been here. I pass on his apologies.

Senator BOB COLLINS
--Thanks. I actually think it is probably
important for that to be noted.

Senator Herron
--In relation to that matter, Senator Collins, my
understanding is that you are correct, but we will take that on notice.

Mr Miller
--I am director of evaluation and audit. Senator, I want
to clarify one matter about these exemptions. You mentioned earlier that
there is a whole range of different types of organisations incorporated
under the act and the act does provide for exemptions to deal with the very
things you mentioned: small organisations and the very small amounts of
money they are dealing with. Whilst I am not involved closely with the
registrar's office, I do know that a significant number of the exemptions
given by the office relate to those very small organisations and are an
attempt to not put them under the same pressures in reporting arrangements
as the bigger ones.

Senator BOB COLLINS
--Just to pursue that, and I honestly do not
know, where that happens for totally understandable reasons because of the
deficiencies of the act--and that is what they are--is there even any
informal arrangement to put something else more appropriate in its place,
or is it simply a total exemption from any requirements?

Mr Miller
--As I understand the act, the organisation can apply
for exemptions from particular provisions and I know many of them do. It
has been up to the registrar to either grant that request or deny it and
require full compliance. But, to the best of my understanding, many of
those smaller organisations do have trouble complying.

Senator BOB COLLINS
--I understand. The point of the question was
this, and I know it is more properly a question for Mr Bouhafs but I
thought again that you may know: are there situations where the registrar
would say to a corporation, `Look, we are more than happy to exempt you
from these provisions, providing you agree to put this in place.'

Mr Miller
--I am not sure. I cannot answer.

Senator BOB COLLINS
--I will not press it. We will ask the
registrar directly by way of notice, the obvious point being that if it is
a case of all or nothing, it is obviously totally unsatisfactory. This
question is a bit loaded. Is it correct that Mr Bouhafs was the only person
to make a submission that in fact more accountability requirements should
be added to the act and that more resources should consequently be made
available--in fact, as I understand it, considerably more resources should
be made available to his office to enforce those requirements?

Ms Sculthorpe
--I cannot answer the question with any accuracy. I
am not sure whether the report states that. We would not have seen all of
the individual submissions.

Senator BOB COLLINS
--I am not suggesting that the review does. I
was simply asking ATSIC or anyone here whether you were aware that that was
the case.

Ms Sculthorpe
--Not aware, no.

Senator BOB COLLINS
--There is a whole stack of questions here
that I actually wanted to ask Mr Bouhafs, but I accept the explanation for
why he is not here. We will have to do that through another other forum.

Senator BOB COLLINS
--I was just going down them, Minister. Yes, I
have got a number of questions that were for Mr Bouhafs and I do not think
they can be properly answered. It is unfair to expect you to answer them
and I will put those on notice. The review cites the latest report from the
registrar which, I quote, shows that fully 48 per cent of Aboriginal
corporations had not submitted financial statements as required for the
previous financial year of 1994-95. Do you know if that figure is correct?

Ms Sculthorpe
--I am unable to confirm that at the moment.

Senator BOB COLLINS
--Thanks. I understand that previous audits
have actually found that up to two-thirds of the corporations were in
breach of the requirements of the act. Does anyone know if it ever was the
case that at some points two-thirds of all of the organisations were in
breach?

Ms Sculthorpe
--No, not exactly. But I do believe that quite a
number of organisations which may have been registered were possibly not
functioning and therefore would not have submitted annual reports and so
on.

Senator BOB COLLINS
--I am aware, having talked to the employees
myself, that the Katherine regional legal aid service in my own electorate
told the review that from their experience corporations were almost
invariably in breach because of the unrealistic requirements that the act
imposed.

Mr Miller
--You asked about previous audits. My office has done
work in regard to the registrar's performance. I think it is fair to say
that about 2 1/2 or three years ago there was a very significant backlog
and large numbers of outstanding returns in the registrar's office. The
then minister spoke to the registrar and put pressure on to have that issue
addressed, and there was certainly great activity in the registrar's
office, with the help a number of commission officers, to address that
situation and bring the backlog back. A lot of that backlog then was due to
a need to communicate with the organisation and get an understanding of
what was required rather than just strict non-compliance, and quite
deliberate non-compliance. So that matter was addressed. I do not know how
the situation is now, but I know that there was certainly a very big
improvement about 2 1/2 years ago.

Senator BOB COLLINS
--In fact, as I understand it, the task force
that was set up in I think 1972--that may be the one you are talking
about--actually found I think it was a 67.5 per cent non-compliance rate. I
do not think they went through all the files; I think they gave up the job
after they had been through half of them.

Mr Miller
--I am talking about a much later exercise than that.

Senator BOB COLLINS
--More recent than that. One of the review
team is Mr Richards, who I am advised is a certified practising accountant
who has actually been auditing Aboriginal corporations for 20 years. He
said:

Aboriginal associations appear to have been singled out for particular
attention in regard to compliance and accountability.

He concluded from that that a very high price was being paid for
overregulation. Again, would that be ATSIC's view?

Ms Sculthorpe
--It is certainly my view.

Senator BOB COLLINS
--Fine. I am delighted that you have been
quite happy to give us your view. I referred earlier to the comparisons
that were made in the review in respect of the requirements, and I think it
was in fact Mr Richards in his report who noted this. I will quote briefly
from it for the record. He says:

The Western Australian Act makes no provision for the lodgment of annual
reports and the South Australian Act requires only those associations whose
receipts exceed $200,000 per annum to lodge annual reports.

That is a very different situation to the requirements for Aboriginal
corporations in the same states under this act.

Ms Sculthorpe
--Can I add, though, that organisations do have the
choice of registering under state legislation if they wish.

Senator BOB COLLINS
--Indeed. Where I come from, the reason a lot
of them don't has got nothing whatever to do with accountability or
anything else. It is just that they see the Commonwealth government as a
lot friendlier to their interests than the local version.

Again, Mr Chairman, I do not know whether you heard but a lot of these
questions are in fact for an officer who is not here tonight, Mr Bouhafs,
so we will organise for these questions to be put to him on notice.

The Australian Indigenous Corporations Commission: in terms of the
Tickner proposals, for want of a better word, does ATSIC have a view on the
desirability or otherwise of establishing such an organisation?

Ms Sculthorpe
--The board was not in favour of that when it
considered the issue at its October meeting.

Senator BOB COLLINS
--So it was considered in October.

Ms Sculthorpe
--Yes.

Senator BOB COLLINS
--Is it correct that the additional amount of
resources necessary to implement the second wave of the Tickner proposals
and to establish this commission would have been $4.5 million, in rough
terms, in the first year?

Ms Sculthorpe
--I believe that was an estimate at one stage.

Mr Sadlo
--If I may expand on that question, those costings would
have been done several years ago and could be a little bit dated, so
perhaps they should be taken with a grain of salt.

Senator BOB COLLINS
--In the sense that they should be in fact
increased rather than decreased?

Mr Sadlo
--I do not know.

Senator BOB COLLINS
--I cannot think of anything that has gone
down in the last two years; can you? The popularity of the government, but
apart from that.

Mr Sadlo
--As you pointed out earlier, the number of organisations
that are no longer in breach has certainly come down.

Senator BOB COLLINS
--Are you aware--and if you are not, tell
me--in terms of that $4.5 million that you have agreed with, that, again in
broad terms, there was a contemplation of an additional 51 staff to
actually expand the registrar's office into a commission? Is that correct?

Ms Sculthorpe
--I am unable to say whether there was a
contemplation. There may well have been a recommendation, but I am unable
to say with any certainty.

Mr Rees
--I think it is fair to say that there are a lot of
figures around, but that order of magnitude, which would be more than
double the present staff, I think probably has been suggested by some, but
I do not think we would claim that any of the estimates are very
scientific.

Senator BOB COLLINS
--Has there ever been--this may be in the
review--an authoritative estimate of the compliance costs of regulations?

Mr Rees
--I do not think so, if you take account of not only
official time but also organisation time and all the resources that go into
it. I have never seen a figure. I suspect that it would be fairly
frightening.

Senator BOB COLLINS
--You are aware of what I am talking about.
Small business associations, for example, regularly publish the costs of
complying with government regulations. I was curious whether an exercise
had ever been conducted by Aboriginal corporations.

Ms Sculthorpe
--I think the answer is no.

Senator BOB COLLINS
--It would be a very interesting figure.
Again, from memory, the review found that, in terms of a relevant element
of compliance, the ratio of staffing requirements for regulation for
Aboriginal corporations was something like 60:1 as compared with standard
incorporated corporations.

Ms Sculthorpe
--I recall reading that, yes.

Senator BOB COLLINS
--It is a fairly astonishing figure. The
compliance costs would be interesting. A general conclusion of the review,
which I know is unarguably correct, is that there is still major confusion
on the ground in the communities themselves over who is responsible in real
terms for ensuring that the services are delivered on the ground in the
communities. The review says that this has led to an `unholy alliance where
ATSIC invokes the registrar as its policeman in dealing with breakdowns in
service delivery.' However, the review finds that true accountability, in
the sense of ensuring that a body achieves the objectives it is being
funded for, is the responsibility of the funding agency.

You have already said that that is your view as well.

Ms Sculthorpe
--Yes.

Senator BOB COLLINS
--The review concludes that there is an
alternative to the current regime. According to the review, it means
acknowledging that the direction taken in 1992 in trying to improve
accountability was misguided. Do you agree with that conclusion?

Ms Sculthorpe
--Yes.

Senator BOB COLLINS
--You do not have to remind me who was in
government at that time; I remember. The review has recommended two major
courses of action. Again, to save asking 10 questions, does ATSIC have a
general position in respect of what should happen? You have already said
that the board has come to a conclusion that there should not be a
commission established.

Ms Sculthorpe
--Yes. The board broadly took the view that the act
should remain and that there should be amendments to bring the act up to
date and make it more modern and workable but that the provisions should
not be any more onerous than other similar legislation. Broadly, that is
the board's view.

Senator BOB COLLINS
--What is ATSIC's position--I think Mr
Schnierer referred to this earlier in the evening in terms of these
different sets of accountability requirements--on this rewrite of the act
and in coordinating the accountability requirements of the registrar with
those requirements of ATSIC?

Ms Sculthorpe
--Amongst the views of the board that I neglected to
mention before was the one that there be a dual reporting arrangement
similar to the arrangement between the Office of Evaluation and Audit and
the ATSIC board and the minister. That is the approach that the board
thought would make that arrangement more workable.

Senator BOB COLLINS
--Do you think it would require any major
review of the actual funding system that ATSIC currently has in place?

Ms Sculthorpe
--ATSIC's funding systems are constantly being
updated. They are the responsibility of someone other than me.

Senator BOB COLLINS
--You referred earlier in the evening to major
upgrades of computer systems dealing with financial management and so on.

Mr Schnierer
--I want to clarify what you are focusing on. Is it
coordination between ATSIC, the registrar and, say, OEA in relation to
accountability?

Senator BOB COLLINS
--Correct. That is right. In consideration of
what has obviously been a significant examination by ATSIC of this, will
any major overhaul of ATSIC's own systems be needed in order to coordinate
the total outcome?

Mr Schnierer
--At this time, we have been through a major review
process. We have an implementation plan going into effect now for a new set
of grant procedures that are, in the general terms that I described to you,
simplified and streamlined. We would, over the course of events, make that
known to the registrar, who is probably fully aware of it. Obviously we
have involved OEA in that process in getting their advice. On those
technical matters, coordination does occur. OEA consults with us about
their programs and plans in terms of audits and evaluations. I am
suggesting that there is a degree of coordination and cooperation already
there. Perhaps you could always look at bringing those closer together by
making sure that they are the best set of practices for organisations. As I
said, ATSIC's focus has been on our own at this time. The review of the
registrar's act is only now coming to a conclusion. It is possibly time to
look at those linkages.

Senator BOB COLLINS
--Can I just say for the advice of everybody
that I will have no difficulty in finishing by 11 o'clock at the latest. If
we can finish on the right side of 11 o'clock, we will do that too.
Minister, I think this question is appropriately addressed to you: as I
understand it, the review has actually been with the government now for
about a year; is that correct?

Senator Herron
--It went to ATSIC for their comment and it then
came from ATSIC to me two weeks ago. They have sought consultation in that
period.

Senator BOB COLLINS
--Considering the fact, which has been
re-established here tonight, that the majority of organisations that have
real problems rather than perceived problems and in respect of which ATSIC,
unfortunately, gets the bad press are organisations incorporated under this
act--which I might add is something we have all known for years--and
considering the lightning speed with which the government moved to freeze
all of ATSIC's outgoings and put a special auditor in, can you give any
indication as to when the government is likely to respond to the review's
recommendations?

Senator Herron
--I have only just received it, as I mentioned. The
board considered it at its October meeting.

Senator BOB COLLINS
--Yes, I understand that the board of ATSIC
has considered it, but do you have any idea when the government will be
considering it?

Senator Herron
--No, I have not. As you know, we have got various
reviews going. All I can say is that it will be as soon as possible
because, as you say quite rightly, the review has been around for 12
months.

Senator BOB COLLINS
--ATSIC has indicated already that the board
has reached a firm conclusion on the desirability or otherwise of setting
up this new corporation or commission. And for what it is worth, which is
nothing, I have too. Would you like to join the loop and tell us whether
you have a view on the desirability or otherwise of responding to the
review by establishing such an organisation with the quantum which has been
agreed tonight--that is, additional resources of $4 1/2 million and maybe
50 additional staff?

Senator Herron
--As I said to you, I have not had the opportunity
to study the review. I will have to pass.

Senator BOB COLLINS
--I think I could make a firm prediction on
what the views of both the minister for finance and the Treasurer would be
about that course of action; I am sure you could too.

Senator Herron
--I just wonder, Senator Collins, by way of comment
whether you have read Peter Walsh's book entitled Confessions of a
Failed Finance Minister.

Senator BOB COLLINS
--Actually, the very first request that I ever
made to the new federal Labor government, when I was then Leader of the
Labor Party in the Northern Territory, was to establish SBS in Darwin. I
have never forgotten that the then Minister for Communications told me that
I had his full support and I thought, `Gee, this is easy.' This was in the
Old Parliament House. This was Mr Duffy who had one hell of a sense of
humour, as I appreciated at the time. After slapping me on the back, Mr
Duffy said to me, `You've got my full support. All you have to do is go
down the corridor and see the finance minister, Senator Walsh, and get his
support for the $2 million it will cost and tell him that I'm right behind
you.' When I spoke to Senator Walsh, he said to me, `You want me to give
you $2 million for SBS?' I said `yes'. He said, `Listen, mate, you're
talking to the man who wants to sell the ABC.' I finished my cup of tea and
left--he was joking, of course.

Senator Herron
--I met him in the corridor two weeks ago and said
that the book could be reissued by a different author and with just the
names changed.

Senator BOB COLLINS
--I used to joke about it afterwards and say,
`If you're going for a meeting with Peter Walsh and you want a cup of tea,
you should take your own tea bags to his office.' He was a good minister.
Again, I think we can handle most of these questions on notice, Mr
Chairman.

CHAIR
--Well done, Senator.

Senator BOB COLLINS
--We are doing well here. Yes, we will finish
shortly. The review recommended that the current registrar's office be
reduced to 10 members with recruitment placing `far greater emphasis on
cultural awareness and communications skills'. Is that a position that
ATSIC supports?

Ms Sculthorpe
--The board certainly has the view that there is an
important need for more education and training of organisations.

Senator BOB COLLINS
--Again, this is stating the obvious but it is
consistent with what the special auditor himself found. The review stated:

Over and over again people complained about the lack of information,
training and advice on what incorporation means, and the roles and
responsibilities involved.

Given the level of funds handled by many indigenous corporations, and
the vital services they provide, it is plainly asking for trouble not to
supply them with the necessary educational services.

I assume that ATSIC would agree with that. The one thing I want to
invite some comment on tonight, if possible, is one of the review's
conclusions. It concluded that the proposed reforms will present ATSIC with
a major challenge and pointed out:

. . . it would be pointless to shift the weight of accountability from
the Act and the Registrar, who cannot deliver the goods, to ATSIC, if it
cannot deliver the goods.

The review clearly demonstrates that the funding regime is the area where
improvements are needed. Is that a conclusion of the review that the board
discussed?

Mr Rees
--We have already acted on that, I believe. Mr Schnierer
was very modest earlier on in talking about our review of grant procedures,
because it is not just a question of playing with mechanics. We have
actually tried to move conceptually from focusing on, if you like,
financial accountability and inputs to looking more at outcomes and
structuring submissions from organisations which are not just talking about
dollars but what they want to do. So I think we are trying very hard to do
what the review suggested.

Senator BOB COLLINS
--Thanks very much.

Ms Turner
--In relation to Aboriginal corporations, we are
trialling a national pilot at the moment, which is costing us $800,000, to
try to bring directors of organisations up to scratch in relation to their
responsibilities under the corporate law area.

Senator BOB COLLINS
--Mr Chairman, I think I can place the rest of
these questions on notice, and I will do so.

CHAIR
--That is fine, Senator.

Senator BOB COLLINS
--I have basically finished with the Daffen
review and the Fingleton review questions. Consistent with what we
discussed earlier and again to save everybody time, I will just have a
quick glance at my questions on other programs. They were relatively minor
by comparison.

I want to talk about Aboriginal employment. I have read a number of
recent statements that have been issued on employment--one by the Chairman
of ATSIC, Mr Djerrkura, recently relating to CDEP. At the last Senate
estimates hearings, ATSIC officers confirmed that they agreed with the
assessment that, barring other interventions, the restriction of any future
expansion of the CDEP scheme could lead to--and I think I am accurate in
quoting the chairman's press statement--an indigenous unemployment rate of
46.6 per cent, in broad terms 47 per cent. It is currently 39 per cent. Is
that still the situation?

Mr Myers
--The projections that are currently in place that you
are quoting are based on the last census. With the 1996 census, the figures
would look far worse. We are still waiting for a detailed analysis of that
and we expect to have that probably within another month from CAEPR, who is
doing a detailed break down from the 1996 census for us. But, basically, if
there is no movement in the general employment market for indigenous people
and there is no growth in CDEP, then the prospects would look very poor.

Senator BOB COLLINS
--As I understand it--and again I am testing
my memory here--the major investigation that was conducted recently by the
ANU's Centre for Aboriginal Economic Policy Research concluded that, if the
unemployment rate of Aboriginal Australians were brought down to equate
with the general unemployment rate, it would require something like 11,000
new jobs to be created every year; is that correct?

Mr Myers
--I do not recall the per annum figure, but the
projection was that, by the year 2006, 70,000 new jobs would need to be
created, which is basically doubling the number of Aboriginal people
currently employed.

Senator BOB COLLINS
--That is quite a challenge. Another
conclusion of that same investigation, as I recall it, was that up to 1993,
largely as a result of the implementation of CDEP schemes, there had been
an increase in employment. I think the national increase over the same
period was 1.7 per cent and there was a figure quoted in excess of six per
cent of additional employment being created in Aboriginal communities over
that same period; is that correct?

Mr Myers
--Yes, there was a large growth in Aboriginal employment,
basically directly attributable to CDEP growth.

Senator BOB COLLINS
--Yes, I thought that was the case.
Potentially, that growth percentage is going to go the other way over the
period of time that we are now looking at.

Mr Myers
--Yes, as the population increases and if there is no
employment growth, either CDEP or other, then certainly the figures will go
backwards.

Senator BOB COLLINS
--Minister, as I understand it, you received
the report of the Evatt review of the heritage protection act in August
last year. I understand that in Geneva in July this year the United Nations
Working Group on Indigenous Populations was told that you expect to
introduce legislation stemming from that into the parliament by the end of
this year. Is that still the case? You understand why I am asking the
question; knowing what we have in front of us in four weeks.

Senator Herron
--It was our intention. The Prime Minister has
been writing to me regularly about what the hold-up is. I have been seeking
extensions. In fact, I have just written to him seeking another extension
to finalise that report.

Senator BOB COLLINS
--Can you share with us the new date?

Senator Herron
--I really should have the officers here with me,
but they have gone.

Senator BOB COLLINS
--You could take that on notice.

Senator Herron
--From memory, I expect it will be next year in
June. That is my advice.

Senator BOB COLLINS
--I will not hold you to that, Minister.
Memory is an unreliable--

Senator BOB COLLINS
--For your benefit and for the purpose of
getting finished tonight, I have already corrected the record. I wanted to
give you the courtesy, but you were not in the room, that your recollection
of the provisions of the Reconciliation Commission Act was correct.

Senator Herron
--I read it three times before taking any action
whatsoever so that I followed due process. That is why I was confident.

Senator BOB COLLINS
--I just wanted to take the opportunity to
reiterate what I have already put on the record. I absolutely agree that
you have followed due process precisely in that regard.

Senator BOB COLLINS
--Minister, considering the answers we have
just received on unemployment and considering the fact that you yourself
have repeatedly nominated that they will be redressed, I wonder if you
could respond to that. Again, I might add that health, education and
employment are the major priorities of this government. Of course, the
reason that I wanted to highlight the substantial growth proportionally in
Aboriginal employment for whatever reason, CDEP or otherwise, that occurred
under the previous government is in response to your continued assertion
that whatever happened in 13 years was a barren wilderness and that you
will redress all of this. I wonder if you could respond to the advice that
has just been given to the committee, again by ATSIC, that on the current
projections--based on the conclusions of that independent analysis that has
just been done--we are likely to have an indigenous unemployment rate of 47
per cent in not too many years ahead. In other words, it is getting worse
not better.

Senator Herron
--Yes, it is the demographics, as you well know.
The increase in young Aboriginal people is quite phenomenal.

Senator Herron
--Yes, but they are not alone in that, Senator
Collins.

Senator BOB COLLINS
--I do not suggest that they are alone either.
There are a great many Australians who would rather see the trailer sailer
in the front yard than have an extra couple of kids. Leaving the
demographics aside, Minister, the question I am asking is a real one based
on your own statement. I understand the break-up of all of that and why,
but you did qualify your commitment to me in a sense. You said that your
government would reverse the spiralling unemployment of Aboriginal
Australians in contrast to the previous government.

Senator Herron
--We did not use those words, Senator Collins, with
respect. Let us not get into the semantics. What I did was appoint Ian
Spicer to do a review. I am awaiting his report shortly. I thought he could
give us an overview. He is somebody who, as you know, has a number of
attributes, apart from his membership of the Reconciliation Council. He is
doing a report for me, and I am happy to provide that when it comes. It is
a major problem. I do not dispute those statistics.

The paradox is that, at the same time as we have these dramatic
increases in young people, the Australian population as a whole is ageing
so rapidly. I think, in another six years, one in six will be over the age
of 65 in this population and, by 2016, one in four will be over 80. I just
find those statistics almost unbelievable, but they are the statistics. I
doubt if I will be around in 2016, but if I am I will be in that group: one
in four of the population. That is the paradox that we have to face. It is
obviously in everybody's interests to get these people employed. We are
going to need them.

Senator BOB COLLINS
--Minister, I would be the last person to
suggest that because of the lack of employment opportunities in isolated
communities, whether they are Aboriginal or non-Aboriginal, it is an easy
thing to solve.

Senator Herron
--I do not think you do, but I am saying that
certainly there will have to be resources diverted, if necessary. I am
happy to go into bat before that dreaded ERC. We did get somewhere with
them last time in that regard.

Senator BOB COLLINS
--In terms of the statements--indeed, your
oft repeated statements--that Labor failed to increase indigenous
employment during its term of government, which is what you did say, I put
on the record that a great deal of that was CDEP.

CHAIR
--It is.

Senator BOB COLLINS
--Yes, it is. The analysis that was done by
ANU, as you know, actually showed an increase in the employment rate over
those years. What I wanted to know is this: are you confident that, in
terms of your own statements and the situation we have just discussed and
agreed on, your government will be able to do what you say it will; that
is, reverse the situation?

Senator Herron
--The difficulty will be, because of that rapidly
ageing population, to prove it because, as a proportion of the employed,
the indigenous will occupy a greater proportion of the young unemployed. So
that is why I mentioned this rapidly ageing population. It is going to be
difficult to prove anything.

Senator BOB COLLINS
--I will finish on this. I will just take one
obvious factor. As you know, there are thousands of Aboriginal Australians
who unarguably qualify, because of their situation, for social security
benefits. That is without an argument--genuine. They are entitled to those
benefits. As you know, they choose--indeed, until very recent times they
were the only Australians who had done so--to voluntarily work for those
benefits.

Senator BOB COLLINS
--Do you not then concede, Minister, rightly
or wrongly and for whatever reasons, that your own government's policy
decision, an actual decision, to restrict the CDEP budget--which, in real
terms, is just social security payments by another name--and reduce the
expansion of the CDEP scheme will, as concluded by the analysis and
confirmed again here tonight, substantially add to the unemployment
problem, not detract from it?

Senator Herron
--Senator Collins, as you well know, we were forced
into that situation because, when we inherited government, not only did we
have a record overseas debt but we had a $10.3 billion deficit and $70
billion in deficits in the four previous budgets as well. So we had to face
that problem.

Senator BOB COLLINS
--I am not disputing here tonight whether or
not that is true. All I am saying is, accepting all those things as givens,
Minister, do you agree with the evidence that has been given here again
tonight and the analysis of the report that, for whatever reason, the
restriction in the expansion of the CDEP scheme, on current parameters, is
going to lead to a dramatic increase in unemployment?

Senator Herron
--Yes, unless that can be changed, and that is what
I am hoping to do. I must pay tribute to you, Senator Collins, before we
finish. One of the things that I have learned from you, both at this
estimates and in the Senate itself, is the reinforcing of that statement
that you made about the benefits to which Aboriginal are entitled, as is
every other Australian. You have brought home to me the significance of
that. I thought I should put that on the record too.

Senator BOB COLLINS
--Thanks, Minister. Indeed, that reminds me of
my final question--this will be the last and I will put the rest on notice.
I freely concede that I am as much at fault in this as anyone because you
actually invited me to do something which, despite the fact that I have met
with you since in your office, I have not had time to do. It is on that
question, rebutting the myths. You will recall we had a `remitting the
butts'. You did tell me that the work had been done, that it was a long
document and you actually did say to me--and I appreciated it--that perhaps
I could have a go at subediting the document.

Senator Herron
--I am happy to because I have been trying to ride
this through. We thought we were there and then the last act was to get the
cartoons to accompany it. Petty is the cartoonist. You could expect no
better cartoonist.

Senator BOB COLLINS
--Has he agreed to do it again?

Senator Herron
--Yes. Petty obviously knows a fair bit about
Aboriginal affairs, but I discovered that some of the cartoons--not all;
some were brilliant--did not portray what we were hoping to portray; that
is, to dispel the myths. I will not go into it in great detail. So I sent
some of the cartoons back. Just to give you a concrete example, he had a
little flag with CDEP to dispel the myths out in the wider community. I am
sure, except for those aficionados and people involved, nobody would know
what CDEP stood for. So I wanted that altered. It is that sort of detail.
But could I say that it is almost there.

Senator BOB COLLINS
--Is the text concluded to your satisfaction?

Senator Herron
--The text is good, yes. It is really only the
cartoons. I did ask the officers this morning where we are at the moment
and, as far as I am aware, it is only the cartoons.

Mr Rees
--It is dependent on the cartoons, as the minister said.
I had hoped to know tonight, but I do not yet know when Petty is going to
get back to us on that.